ACTE holds Toronto education forum

The hotel market, future of travel management companies and fostering innovation among themes during Association of Corporate Travel Executives forum

April 8, 2014
by Michael Power

TORONTO—Professionals in the business travel industry met in Toronto recently to network and enhance their understanding of the corporate travel market during an education forum held by the Association of Corporate Travel Executives (ACTE). The event, held at Toronto’s One King West Hotel & Residence, featured several speakers and a senior executive panel discussion.

Among the speakers was Erin O’Brien, senior associate at PKF Consulting, who discussed Canada’s hotel market. The economy has witnessed more optimism recently, she told the audience, with the country’s GDP rising from 2.3 percent to 2.6 percent.

“That’s a good thing for the economy but also for the hotel sector as well,” she said.

Western Canada has outperformed Central and Eastern Canada in the hotel sector O’Brien said. Meanwhile, in 2014, Central Canada will see the strongest growth across the country with the West close behind. Atlantic Canada has seen slower growth, she said.

Calgary will lead the country in 2014 in terms of revenue per available room (RevPAR), O’Brien said. The city’s robust growth is attracting interest in development; as well, the hotel industry there has seen roughly an eight percent increase in supply.

Vancouver is also poised for growth in the hotel area, O’Brien noted, not only in the downtown core but the full metropolitan area including the airport. Next year, 2015, will prove significant for the city’s hotel community, with the TED Conference and NHL Heritage Classic held there.

Austerity measures have had a large impact on Ottawa’s hotel market, O’Brien noted, with 19,000 public service job cut in recent years (mostly in that city). The 1.8-percent drop in employment there has affected the hotel sector as well.

Toronto has seen modest economic growth recently with some new supply in the hotel sector, O’Brien said. Major events like the Toronto 2015 Pan Am & Parapan American Games will bring large numbers of people to the city. Montreal has experienced a soft economic performance, O’Brien said, although the city had also seen some turnaround recently. Several Montreal hotels have been closed or converted into student residences or seniors’ homes.

“It’s a pretty telling sign in that hotel sector,” she said. “It doesn’t mean that you can’t make money, it just means that it’s hard.”

Also during the forum, an executive panel entitled The TMC Equation sought to shed light on the future of the travel management company sector. In discussing the managed travel industry five years from now, panelist Sherry Saunders, senior vice-president and general manager, Canada and North America leisure, Carlson Wagonlit Travel, noted that the world in general was in a “kaleidoscope of change,” with the pace of that change quickening. But as the world morphs, the need to manage travel will remain. But the “consumerization” of managed travel will escalate as employees expect to transact the same way for business travel as they do in other areas of their lives.

“We have to embrace technology and link that with how we create compliance,” she said.

Tristan Lockie, managing director of MeritBiz, said that TMC’s must consider how to differentiate their services. Lockie noted that clients tell him they see many online booking tools, although each travel management company can configure and service those tools differently. A big shift is that TMCs are working towards process management rather than just booking. In the future, clients will receive end-to-end solutions.

Mobile platforms have become fundamental, said Colin Temple, vice-president and general manager, global business travel, Canada, American Express Canada. Currently, 50 percent of the North American workforce is comprised of Generation X and Y employees. Travel management companies must integrate mobile platforms into all their services, which can help provide employees with a seamless travel experience.

The forum’s keynote speaker Mark Bowden spoke about innovation and how to move towards productive innovation. To get a breakthrough on an issue, Bowden recommended four steps. The first step was immersion in a problem in order to gather data and to work out what the rules of the system are. From there, think about what rules can be broken in pursuit of a solution and what rules will lead to poor results.

The third step is to wait, because no answer will present itself yet at this point. Step four, Bowden said, was to push your idea really hard. But be prepared for those around you to push back.

“The people who asked you to be innovative are going to be the first ones to say no,” he said.